BlackBerry Says Western Nations Wouldn’t Allow China Bid

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BlackBerry Ltd. Chief Executive Officer John Chen said in July that he wouldn’t be able to accept a takeover offer from a Chinese company even if he got one because Western governments that rely on his phones probably wouldn’t allow it.

“We probably are unable to do that,” Chen said in an interview that was taped on July 23 and will air tonight on Bloomberg TV’s “Studio 1.0,” when asked if he would sell BlackBerry to a Chinese company. “One of our biggest install bases is government in the so-called Five Eyes countries where governments share intelligence. I think there will be a lot of regulatory issues and concerns.”

BlackBerry shares jumped 8.5 percent on Oct. 20, the biggest gain since June, after Benzinga cited an unnamed source saying Beijing-based Lenovo Group Ltd. could make an offer for the company.

The Five Eyes is an intelligence cooperation agreement between the U.S., Canada, the U.K., New Zealand and Australia. Waterloo, Ontario-based BlackBerry has focused on its reputation for security as it works to win contracts to manage mobile devices for corporations and governments. U.S. President Barack Obama, German Chancellor Angela Merkel and U.K. Prime Minister David Cameron have all been spotted using the keyboard-equipped device.

BlackBerry fell 4.2 percent to $10.46 at 3:03 p.m. New York time.

China Partnerships

Chen, a native of Hong Kong, did say last month that he’s interested in partnerships with Chinese companies to help increase BlackBerry’s presence in the world’s largest smartphone market. He made the comment at the Asia-Pacific Economic Cooperation CEO Summit in Beijing, where he met with the heads of Lenovo and Xiaomi Corp.

Lenovo had expressed interest in a possible deal with BlackBerry last year before the manufacturer tried and failed to sell itself.

For now, Chen said he has no takeover offers on his desk for the $5.8 billion company.

“Talk is not an offer,” he said. “I would prefer to build a lot of value before I even contemplate” selling.

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